Britain’s cities are falling either side of a divide. A few—mainly the big ones—are growing at the core and faltering towards the edge. London’s highest levels of unemployment used to be in the inner city borough of Tower Hamlets, now they’re in the suburbs of Greater London: Barking and Dagenham and Newham. Between 1998 and 2008, Birmingham’s private sector job numbers stayed flat but moved inward (they grew 27% at the centre). But most of Britain’s towns and cities—places like Luton, Wakefield, Sunderland—are doing precisely the opposite: the action is on the outskirts, the centres ever more deserted. Fully 22% of Sheffield’s central business units stand empty; in 2011 McDonald’s left Rochdale centre (though not its edges). If London is getting more like Paris, these towns increasingly resemble America’s sprawling cities, such as Cleveland and Houston.

What gives? Just spitballing, the NYC effect on Philly might be the equivalent of the London effect on European cities outside of the UK. Paris is like a suburb of London given the very functional commute. Thus, UK cities further down the urban hierarchy don't see any trickle down from London's powerful agglomeration economy.

Between 1997 and 2012, Jussieu’s campus in Paris’s Left Bank reshuffled its labs’ locations five times due to ongoing asbestos removal, giving the faculty no control and little warning of where they would end up. An MIT professor named Christian Catalini later catalogued the 55,000 scientific papers they published during this time and mapped the authors’ locations across more than a hundred labs. Instead of having their life’s work disrupted, Jussieu’s researchers were three to five times more likely to collaborate with their new odd-couple neighbors than their old colleagues, did so nearly four to six times more often, and produced better work because of it (as measured by citations).

Forced to be nomads, the researchers did better work. The magic of cities are new odd-couple neighbors, not great density.

Ireland has been ranked in 6th place among 60 countries in terms of its ability to develop, attract and retain talent for companies. It is also placed in 13th spot in a separate poll on the best places in the world to do business. ...

... “The best-ranked countries have a balanced approach between their commitment to education, investment in developing local talent, and their ability to attract overseas talent,” said Prof Arturo Bris, director of the IMD World Competitiveness Center. “Countries with smart talent strategies are also highly agile in developing policies that improve their talent pipeline.”

For talent, migration is brain gain. For companies, migration is a loss of intellectual property. Workforce development programs share the view of companies. Talent is developed for the benefit of local companies. In this sense, the interests of business are at odds with the interests of talent. Countries that are pro-business are necessarily anti-talent. Workforce development is nothing more than a public subsidy for private businesses. That's a rotten policy.

Postscript: Economist Edward Glaeser wrote, "Retaining talent requires us to fight the regulations that make entrepreneurship too rare and housing too expensive." He's wrong. If you disagree, then read this. I accept Glaeser's conclusion that land use regulation drives up real estate prices. But when Glaeser infers migration patterns from his analysis, he looks foolish. He's over-interpreting his results. I wouldn't care save that others take such statements as policy gospel. Where's the proof that fighting regulation that makes housing too expensive retains talent? The evidence (you know, actual migration research) says otherwise. If you find evidence linking zoning regulations to migration, please share. That would be useful regarding gentrification. Citing Glaeser or other similar work as proof that zoning deregulation would help mitigate gentrification is ignorant.

“My interpretation of these results leads to a focus on pupil aspiration, ambition and engagement. There is nothing inherently different in the ability of pupils from different ethnic backgrounds, but the children of relatively recent immigrants typically have greater hopes and expectations of education, and are, on average, more likely to be engaged with their school work.

“This is not by chance of course. A key point about London is its attraction to migrants and those aspiring to a better life.”

“For a city like Philadelphia, which needs to raise the college attainment of its residents to remain competitive and fulfill employer demand, having so many college students in our own backyard is a great advantage and a great asset to leverage,” says Deborah Diamond, Campus Philly president. “At the same time, as the Boston paper accurately points out, the mission and goals of higher eds is to educate students for the world, not the just local labor market, and this is especially true in regions like Philadelphia and Boston where our higher eds draw students from around the world.”

Diamond states the university mission diplomatically. No place can lay claim to any talent. Places don't own people. As long as people develop, what happens to a place shouldn't matter.

Postscript: As I hope this post demonstrates, real estate markets are a lot more complicated than the usual platitudes about unleashing supply as a solution to housing affordability problems. Even within so-called rural markets, there is substantial heterogeneity. For example:

Rural counties with a large proportion of "creative-class" workers have tended to recover more quickly from the recession. But "amenity-rich" areas near national parks and other natural areas aren’t doing nearly as well, even though they boomed in the 1990s. ...

Creative-class counties that don’t have big natural amenities may have performed better because they tend to be located closer to metro areas and may be part of metro “commuting sheds,” the study says. Counties that are rich in natural amenities, on the other hand, tend to be located farther from metro areas – think of Park County, Wyoming (with Yellowstone National Park) or Flathead County, Montana (Glacier National Park).

Another factor is that creative-class counties that were not amenity rich also were more likely to be college or university towns, which can provide some insulation from economic cycles, the study said.

I've highlighted the part of the passage that resonates with my blog post about the rural housing shortage. Small towns and the like that can tap into global jobs (tradable and divergent industries) can afford the rents necessary for new housing construction. Small towns and the like with a jobs base of manufacturing (tradable but convergent industries) cannot. For people toiling in nontradable jobs or tradable convergent jobs, the ideological thrust of deregulating housing construction won't solve the rent is too damn high problem.

But the rate of population does not affect the growth rate of per capita GDP. Here’s a scatter diagram (Graph A) for the OECD (Organisation for Economic Co-operation and Development) member countries over the last forty years showing the average growth rate of GDP per person and the average growth rate of population. This reveals that and there’s absolutely no correlation between the two. For example, in Mexico, where the average annual growth rate of population was whopping 2%, the annual growth rate for the GDP per capita was only 2%. There is even a country with a negative population growth rate having a growth rate of per-capita GDP at more than 5%.

Population growth does not equal economic growth. Demographic decline does not equal economic decline. Population change does not take the temperature of a regional economy or real estate market.